Fastenal jumps to all-time highs following Q1 report

Apr. 11, 2019 2:26 PM ETFastenal Company (FAST), XLI, VIS, FIDU, IVES, IYJ, FXR, AIRR, RGI, UXIXLI, IYJ, VIS, FAST, UXI, RGI, FXR, FIDU, AIRR, IVESBy: Carl Surran, SA News Editor2 Comments
  • Fastenal (FAST +4.6%) is surging after its narrow Q1 earnings beat, but investors are focusing on the company’s stabilizing gross margin and improving operating margin.
  • FAST reported gross margin slipped to 47.7% from 48.8% in the year-ago quarter but analysts think the downtrend may have run its course, and operating margin rose 20 bps Y/Y to 20%, indicating an effective effort in managing costs.
  • Demand also remains healthy, as FAST delivered its eighth straight quarter of double-digit revenue growth; for Q1, net sales increased ~10% to $1.31B, in line with expectations.
  • Wells Fargo's Allison Polinak says FAST's March sales ended the quarter on a positive note, and "importantly... the spread between national account and non-national account growth narrowed to 11% vs. 13% previously. We view this as a positive indicator for the macro environment," showing that small businesses are growing as much as FAST's large multinational customers.
  • FAST has exposure to many cyclical, economically-sensitive industries such as construction, original equipment manufacturers, railroads, oil and gas, and transportation, and 85% of its business is generated from the U.S.
  • ETFs: XLI, VIS, FIDU, IFLY, IYJ, FXR, AIRR, RGI, UXI

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